Apple Inc. (NASDAQ:AAPL) has captivated the Street’s attention ahead of its September 12th media event in California, where all eyes are waiting to see if a new iPhone 8 will at last be unleashed to an eager tech public.
The research team at Ned Davis firm anticipates that when it comes to Apple events, it is wiser to take a “profit more than seven days before the new iPhone announcement.” Time is of the essence to playing it smart in the tech world, says Ned Davis, who argues that “Historically, most of the relative price gain [compared to the S&P 500 Index] is already reflected prior to the announcement.”
When glancing back at the history of the tech titan’s showcase ahead of product announcements and directly following, pacing “absolutely” makes a difference: “The median Apple return beats the market by 890 basis points (bps) 42 days prior to the announcement date with 90% of cases having a positive relative return.”
Meanwhile, “If we look 21 days prior, the gain and percent of cases outperforming drop to 350 bps, and 80%, respectively,” continues Ned Davis.
Not only did the analysts peer back to 207, the year the tech titan first made the iPhone a household name, but even in more recent times, “July and August are the two consecutive months that have highest average returns of 514 bps and 463 bps,” adding, “and percent outperformance, with both above 80%.”
As far as Ned Davis sees it, if investors are looking for big returns, “Since most of the good news tends to be priced into the stock ahead of time, holding Apple’s stock near the iPhone announcement may not contribute to excess returns.”
Ultimately, the case is simple for the research team: “The old saying, ‘buy on rumor, sell on news’ continues to work in this case.”
Wall Street is rooting for this tech titan, considering TipRanks analytics exhibit AAPL as a Buy. Based on 33 analysts polled by TipRanks in the last 3 months, 24 are bullish on Apple stock while 9 remain sidelined. With a return potential of 5%, the stock’s consensus target price stands at $170.73.